I'm looking to buy a home and received a pre-approval from BofA at 5.25% on $108,000. I already signed a contract at $108,000 on a home with seller concessions of $3240. Also did termite and house inspection with the house in very good condition, no issues at all. At this point I believe the appraisal should be a cake walk with the house in foreclosure and surrounding homes valued around $110K-$130K. By the way my credit score is 700.
My question is will I get a full approval on the loan because of my income? Mortgage payments (including principle, interest, PMI, taxes, home insurance, and HOA) is expected to be about $810/month. I have 3 credit card payment of $15/$15/$25 with a total $55/month. But my monthly gross income is only $2000/month. Is that ratio low enough for full approval?
Well, here's an update to the numbers I'm looking at:
Sale price: $108,000
Down payment: $3780
mortgage: $104,220
interest rate: 5.25% (at this time in March 2011, credit score was 645. Credit score now is 700, of which I hope we can get a better rate.)
estimated home insurance (from AAA): $450
Tax is: $960/year
Other debt (credit cards): $55/month (total is $600)
Income: $2000/mo

If all your numbers are accurate and and your scores are as high as you say that would put you at a 43% back end ratio. Do you currently rent because if not payment shock can be an issue in getting you approved. Do the credit cards you have on your credit have at least 12 months history on them?

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